I believe that not enough distinction is made between sales commissions and service fees. My preferred way of doing business is for clients to pay a quarterly fee, essentially a retainer, which covers any and all costs for financial planning and advice, operational services, and sales commissions. However, not all clients have enough assets to qualify for a fee-based program, or do not need all of the services that type of program includes. I do not sell A-shares outside of fee-based programs because I believe upfront payouts do not encourage the provision of ongoing service. I use C-shares because they provide a 1% upfront commission and an ongoing 1% trail to the advisor for ongoing advice and service. With C-shares, advisors are compensated appropriately and are not encouraged by the payout structure to churn accounts, or ignore clients service needs. Given the high payout for A-shares, advisors who use C-shares are making a calculated decision that they will provide good enough service that they will retain clients for many years to come. I am very concerned that if the choice is between A-shares which pay 4% upfront and C-shares which pay 1% for 4 years, advisors will simply take the upfront cash and provide no ongoing service (unless they know more deposits are coming). A basic understanding of the time value of money makes it clear that 4% over 4 years is not equal to 4% on the day of sale. Clients are not paying for the 60 seconds it takes to place an order (a sales commission), they are paying for ongoing advice and support. When the revenue from a client stops, so does the ongoing advice and support. The SEC proposal may be trying to protect investors from deceptive fees, but the unintended consequence is that they may be protecting them from any ongoing service.